At one point on Monday the S&P 500 was down more than 3%. On the other hand, Bitcoin (BTC) climbed, finishing the day up 2.7%. With gold continuing its parabolic rise, is this the time for these two assets to become the safe-havens they were created for?
$1.5 trillion wiped from U.S. stock markets
With China proving to be a steadfast opponent of President Trump’s tariffs strategy, the US markets are going through the utmost turmoil. The S&P 500, Dow Jones, and Nasdaq, all experienced sharp declines on the day, and an estimated total of more than $1.5 trillion was wiped off across public American companies.
Trump Vs Powell
It’s not just the trade war with China and the rest of the world that is making the markets seethe and boil continuously, but also the very public battle between President Trump and Federal Reserve Chairman Jerome Powell.
While Powell maintains that the Federal Reserve is completely independent of the US government, President Trump is constantly attacking the Fed Chairman, most recently, in a social media post, calling him a “major loser” for not lowering interest rates.
With markets extremely concerned over the possibility of the Federal Reserve losing its independence to the Trump administration, at the same time, some might acknowledge that the Federal Reserve is in fact a private institution with much influence wielded by the big U.S. banks.
$BTC achieves a higher high
Source: TradingView
The short-term chart for $BTC demonstrates that the bulls were finally able to hold the $87,000 horizontal level and turn it into support. The price has since consolidated above and has made its way up to the very important $88,600 resistance.
The huge positive achieved earlier on Tuesday was a higher high. This now opens the door to a complete reversal of the downward trend that has persisted ever since $BTC reached its $109,000 top.
Nevertheless, with all short-term Stochastic RSIs at the top, a downward impulse could be on the way. Whether this takes the price back to $87,000, or the top of the pennant at around $85,000, remains to be seen. A breakout of the $88,630 resistance could come first.
$BTC pauses at 200-day SMA
Source: TradingView
The daily timeframe for $BTC shows that the price is currently nudging up against the 200-day simple moving average. Bearing in mind that the price is also up against the big trend-change resistance level, this may be a great place for the next corrective impulse.
This would potentially be the time to make a higher low before going on to break through the 200-day SMA and back up to the highs. The Stochastic RSI can be seen towards the bottom of the chart, with the indicator lines right at the top, and ready to turn back down, while just below this, the RSI is displaying the same break of trend as the price chart above. There is the possibility that this trendline could be retested.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.